Former RBI Governor D Subbarao has said that maintaining an economic growth of 7 per cent or above will require stronger private investment, labour-intensive manufacturing, better human capital and stronger integration into global value chains.
Moreover, he said the challenge is not simply to sustain high growth, but to make it more productive, employment-intensive and resilient. He stated ‘India's 7.8 per cent growth in the first quarter suggests that the economy is more resilient than many expected... I am optimistic about India's medium-term prospects, but not complacent’.
He said three key factors had supported growth momentum in the first quarter. Domestic consumption has remained resilient; public investment in infrastructure has supported demand and helped crowd in private investment in some sectors; and manufacturing and services, particularly financial, real estate and professional services, have performed well.